Can our government borrow unlimited sums?
Kurt Brouwer July 22nd, 2009
Here is an important point from James Hamilton, an economics professor at the University of California, San Diego, and a blogger at Econbrowser.
I pulled this quotation because it expresses a concern many of us have about the U.S. government and its ability to just keep borrowing and spending. This is an excerpt from a lengthy post on the blog [emphasis added]:
…I fear that the United States government is mistakenly assuming that it can borrow essentially unlimited sums without undermining confidence in the dollar itself. The real question of a successful exit strategy, in my opinion, is how do we extricate ourselves from the joint fiscal commitments currently assumed by the Treasury, the Fed, the FDIC, the Medicare and Social Security trust funds, and various and sundry implicit and explicit federal guarantees?
The answer, in my opinion, is not to be found in the Treasury doing even more borrowing on behalf of the Fed or the Fed doing even more borrowing on behalf of itself.
The answer, of course, is no. The U.S. government cannot borrow unlimited sums. Eventually, we will have to live within our means.
See also:
Bailout: $23 trillion and counting
60% Say No More Stimulus Please
- Economy , Geopolitics , Money , debt , deficit
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